5 best stablecoins to invest in November 2023

By:

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

Updated: Jul 6, 2023

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This guide introduces stablecoins and explains why you might want to own one. Then find out which ones our experts have picked out as the best coins to invest in this year.

What are stablecoins and why are they so important?

Stablecoins are cryptocurrencies whose value is tied to that of another financial asset, such as the US Dollar. They are designed to maintain a stable value – hence the name – and thus solve the problem of volatility, which has made it difficult for cryptocurrencies to become a reliable store of value up to now.

To some extent, stablecoins offer a middle ground between regular (fiat) currencies and cryptocurrencies. They offer the benefits of decentralisation; privacy, speed, and security, without the extreme volatility that can affect cryptocurrency.

How and where can I buy stablecoins now?

You can get stablecoins through a cryptocurrency broker, just as you would any other form of cryptocurrency. Stablecoins are widely available on broker platforms because they often act as an intermediary for users to change money from one crypto coin to another. You can sign up to any of the platforms below to get started with stablecoins now.

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5 easy steps to buy stablecoins

The process of purchasing stablecoins is quick and simple, so don’t worry, even if you’re new to crypto investing. These are the steps to follow in order to complete your investment:

1. Choose an exchange. The best way to buy stablecoins is through a cryptocurrency exchange. These are marketplaces that bring together buyers and sellers for different crypto tokens. 
2. Create an account. Once you have selected an exchange, you need to create an account. This is a simple process but you will have to provide some contact information and a copy of your photo ID.
3. Deposit funds. Log into your new account and add funds. You can normally do this via a bank transfer or card payment, although sometimes you might have to transfer cryptocurrency from a connected wallet.
4. Purchase coins. Search for the ticker of the coin you want to own, then enter how much of it you want to buy. 
5. Execute your order. Once you are happy with everything, execute the trade to submit your order and the coins will be added to your account.

The top 5 stablecoins to invest in now

Our expert picks for the top stablecoins to invest in today can be found in the table below. These are the most innovative and reliable stablecoins on the market and represent some of the most exciting projects available right now.

1. Tether (USDT)

Tether was launched in 2014 and is the best known and most actively traded stablecoin. Its market cap and daily trading volume are both significantly higher than any of its closest competitors.

The price of each coin is tied to that of the fiat currency it represents, because Tether owns enough fiat currency reserves to back up a 1:1 value. In this case, that currency is the US Dollar, although Tether also offers stablecoins that are tied to the value of the Euro and Chinese Yuan. 

As is the case with every coin on this list, Tether’s value lies in its reliability. Rather than offering a way to speculate on price changes, Tether gives people and businesses the opportunity to effectively use fiat currencies on the blockchain, either as a means of payment in its own right or as somewhere reliable to transfer funds away from volatile cryptocurrencies.

Learn more on how to buy Tether in this updated guide.

2. USD Coin (USDC)

USDC is the second largest stablecoin in the world. It was first released in 2018 and, along with Tether, has dominated the stablecoin market in recent years. Where Tether is the most popular stablecoin for traders, USDC has built up the best infrastructure to allow people to actually send money around the world in a digital form.

Another of the big advantages of USDC compared to Tether is that it’s much more transparent. Its reserves are audited every month by the accountancy firm, Grant Thornton, to confirm that the value of its reserves is at least equal to the amount of USDC in circulation.

Many applications on the blockchain already accept payments in USDC and it has made a big play of establishing itself as the stablecoin of choice for businesses as well. It claims to have achieved regulatory approval by a number of banks already and is comfortably the ‘best of the rest’ after Tether, at the very least.

Learn more on how to buy USDC in this updated guide.

3. Binance USD (BUSD)

Binance USD is a stablecoin that was released by the team behind the Binance exchange platform. Launched in 2019, it’s another coin that is backed by the US Dollar and can be exchanged at a 1:1 ratio.

There are a few unique features that help BUSD earn third spot on this list. The first is that using it in transactions on the Binance exchange means you don’t have to pay any fees, while the fact it can be used on Binance means it can be swapped for a huge range of different cryptocurrencies.

Finally, BUSD is a regulated stablecoin, having been approved by the financial authorities in New York. The Binance exchange gives it added security, while it too undergoes a regular auditing process to ensure it can support a 1:1 exchange ratio at all times.

4. True USD (TUSD)

True USD is another stablecoin where its value is linked to that of the US Dollar. It was launched in 2018 and is part of the Trust Token platform, which is more like a hub of decentralised finance that offers banking services in cryptocurrency.

Along with those banking services, the Trust Token platform offers a number of different stablecoins that are linked to different currencies. Along with TUSD, there are TGBP (British Pound), TAUD (Australian Dollar), TCAD (Canadian Dollar), and THKD (Hong Kong Dollar) stablecoins available too.

A feature of True USD and Trust Token is that you can earn rewards for lending your coins. This is similar to earning an interest payment on money you have in a savings account and can be accessed through the Trust Token app.

5. Terra USD (UST)

Terra USD is the final stablecoin on this list and it operates slightly differently to the others. Released in 2020, it works in tandem with another cryptocurrency, LUNA, in order to maintain a stable value.

This method, where $1 worth of LUNA is destroyed in order to create a TUSD coin, sets it apart from the other coins on this list. It’s also the newest coin, and those two factors have combined to make it one of the most upwardly-mobile stablecoins around over the last year.

Along with offering two cryptocurrencies, the Terra platform is also a place where developers can build new software, through the creation of ‘decentralised apps’, or dApps. Already more than 100 different projects operate on the Terra system.

Learn more on how to buy Terra in our comprehensive and update guide.

Before investing in stablecoins

You should consider the pros and cons of stablecoins before investing in any of them. The table below summarises all the most important things you should be aware of.

Benefits of investing in stablecoins

Stablecoins are cryptocurrencies without the volatility. That means you can store and spend your money digitally, without having to use a traditional bank or financial institution. It also means that you don’t run the risk of that money experiencing wild swings in value.

There are many side benefits to using stablecoins as well, such as the ability to earn extra money through ‘staking’; which works a little like a savings account and pays a rate of interest. Some coins offer beneficial rates on certain platforms, such as the Binance USD coin that offers zero transaction fees on the Binance exchange.

Another feature is that this type of coin tends to have more regulation than other cryptocurrencies. Many of them are audited by professional accounting firms, or have achieved some form of regulatory approval from financial authorities. As a result any investment in a stablecoin is likely to be a reliable one.

Risks of investing in stablecoins

The main risk is the fact that these coins are often linked to fiat currencies, and thus are much more affected by the traditional finance world than other cryptocurrencies. While most cryptos are part of an alternate financial system, stablecoins that are pegged to the value of the US Dollar rely on its performance.

Similarly, the flip-side of their price stability is that there isn’t the same potential for rapid price increases in stablecoins as there is with most coins. These are more like safe haven assets – very roughly equivalent to bonds in the traditional world – than the rest of the crypto market, which operates more like the stock market.

The final point to consider is that although many stablecoins own a large reserve of currency as collateral, there is obviously a chance for something to go wrong. A coin like Tether, for example, supplements its reserve with loans which adds a layer of extra risk into the equation.

How can I find the best stablecoins prospects?

The stablecoin market is relatively straightforward and, generally speaking, the biggest names are the best option to invest in. That’s because you want reliability and volume in a stablecoin and you aren’t looking for the potential for it to grow in value.

However, there are always new projects springing up and these can often work in unique ways. Coins like Ampleforth and Reserve Rights offer completely different ways to stabilise the value of a coin that are based much more heavily on blockchain technology and cryptocurrency assets.

There is more risk to investing in a stablecoin like that, but you can keep an eye on new projects through the latest news, or get the most up to date analysis of the space below. To go ahead and invest in one of the best stablecoins right away, click the button to find a broker now.

Latest stablecoin price analysis

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